Expensive School Funding Change a Slippery Slope?

The state Senate this week passed most of the bills contained in a legislative package that would create an expensive new government bureaucracy to fund pay-to-play public school services and extracurricular fees through parent savings plans.

The one part of the plan that didn’t pass, however, would have made contributions to the savings plans tax-deductible.

Five of the six bills in the package—SB 544-549 would create the Enhanced Michigan Education Savings Plan (EMESP) to allow parents to save for K-12 public education expenses. Critics say the bills would cost school districts millions of dollars and worsen inequities between wealthy and poorer communities.

The one bill that did not pass, SB 549, makes contributions to the EMESP accounts eligible for state income tax exemption up to $5,000 or $10,000 for joint filers—a move that would reduce state tax revenue and further erode funding for all school districts.

Call your state representative to oppose these bills, which a Senate Fiscal Agency analysis estimates would cost $60-100 million, plus ongoing administrative costs for school districts. Spending of $40 per student ($60 million) could more simply be used by the state to directly fund parents’ out-of-pocket school expenses across Michigan, if that were the only goal of the bills.

Critics say the legislation, sponsored by Sen. Patrick Colbeck (R-Canton), could lead to a break-up of foundation and categorical funding into a per course, per credit, or per activity basis—instead of per pupil—not far down the road. Other longer-term shifts could include diversion of state funding into accounts directed by parents.

Under the bills, the Michigan Department of Education (MDE) is allowed to designate “other organizations” that could receive funding from the savings accounts—including private companies, a possible step toward similarly steering tax dollars to private companies in the future.

Colbeck said in an interview on a conservative news/talk radio station in January that his goal with the bills is to put parents in direct control of how their education dollars are spent in order to promote “competition” among schools.

The bills would create the EMESP, a mechanism for parents to pay for out-of-pocket K-12 costs, such as transportation, uniforms, or band instruments, for services provided by public schools and potentially other entities.

The legislation directs the MDE to prescribe K-12 services that may be paid for using the EMESP accounts. Public schools, including charter schools, would be required to create a complete list of all services and the costs for providing each service, as well as additional reporting to MDE and the Department of Treasury, if the district wanted to receive funds from the educational savings account.

Parents without the means to contribute to a savings account would not benefit from the program.